Discount rate 8%
all figures in thousands of $
machine A year 0
net benefits 0
investment 72
net value -72
discount factor 1.00
present value -72.00
NPV 7.85
present value annual benefits 0.00
present value investment 72
PV total benefits (B ) 79.85
PV total costs (C k + C r ) 72.00
PV benefit/cost ratio B/(C k + C r ) 1.11
Payback period (Investment / Ann. Undiscounted net benefits) (yrs) 3.6
1 2 3 4 5
20 20 20 20 20
0 0 0 0 0
20 20 20 20 20
0.93 0.86 0.79 0.74 0.68
18.52 17.15 15.88 14.70 13.61
18.52 17.15 15.88 14.70 13.61
0 0 0 0 0
all figures in thousands of $
machine A year 0
net benefits 0
investment 25
net value -25
discount factor 1.00
present value -25.00
NPV 4.75
present value annual benefits 0.00
present value investment 25
PV total benefits (B ) 29.75
PV total costs (C k + C r ) 25.00
PV benefit/cost ratio B/(C k + C r ) 1.19
Payback period (Investment / Ann. Undiscounted net benefits) (yrs) 3.4
1 2 3 4 5
7 7 7 7 7
0 0 0 0 0
7 7 7 7 7
0.93 0.86 0.79 0.74 0.68
6.90 6.39 5.91 5.48 5.07
6.90 6.39 5.91 5.48 5.07
0 0 0 0 0
all figures in thousands of $
machine A year 0
net benefits 0
investment 189
salvage value 0
net value -189
discount factor 1.00
present value -189.00
NPV 20.84
present value annual benefits 0.00
present value investment 189
PV total benefits (B ) 209.84
PV total costs (C k + C r ) 189.00
PV benefit/cost ratio B/(C k + C r ) 1.11
Payback period (Investment / Ann. Undiscounted net benefits) (yrs) 3.8
1 2 3 4 5
50 50 50 50 50
0 0 0 0 0
0 0 0 0 15
50 50 50 50 65
0.93 0.86 0.79 0.74 0.68
46.30 42.87 39.69 36.75 44.24
46.30 42.87 39.69 36.75 44.24
0 0 0 0 0
all figures in thousands of $
machine A year 0
net benefits 0
investment 26.8
salvage value 0
net value -26.8
discount factor 1.00
present value -26.80
NPV 5.14
present value annual benefits 0.00
present value investment 26.8
PV total benefits (B ) 31.94
PV total costs (C k + C r ) 26.80
PV benefit/cost ratio B/(C k + C r ) 1.19
Payback period (Investment / Ann. Undiscounted net benefits) (yrs) 3.4
1 2 3 4 5
8 8 8 8 8
0 0 0 0 0
0 0 0 0 0
8 8 8 8 8
0.93 0.86 0.79 0.74 0.68
7.41 6.86 6.35 5.88 5.44
7.41 6.86 6.35 5.88 5.44
0 0 0 0 0
Machine A Machine B Machine C Machine D Best?
NPV 7.854 4.746 20.844 5.142 A
Benefit/Cost 1.109 1.190 1.110 1.192 D
Payback Period (yrs) 3.60 3.36 3.78 3.35 D